Commercial Property Investors Property Owners Policy
FUSION Insurance Services Ltd Commercial Property Investors Property Owners Insurance Policy Contents Page Your Policy 2 Policy Definitions 4 Section A Property Damage 6 Section B Loss of Rent 14 Section C1 Employers Liability 20 Section C2 Public Liability 22 Section D Terrorism Insurance 26 Policy Exclusions 27 Special Clauses 31 Policy Conditions 33 Legal Expenses Section 36 Complaints and Compensation 45 1
Your Policy This Policy is issued in accordance with the authorisation granted under contract to Fusion Insurance Services Ltd, acting on behalf of a consortium of leading UK insurers. The Company in consideration of the payment of the premium shall provide insurance against loss destruction damage or liability occurring at any time during the Period of Insurance (or any subsequent period for which the Company accepts a renewal premium) in accordance with the Sections of the Policy shown as operative in the Schedule subject to the exclusions, provisions and conditions of the Policy. The Policy and the Schedule should be read together as one contract and the Proposal Form or Statement of Fact made by the Insured is the basis of the contract. Important We recommend You read this Policy together with Your schedule to ensure that it meets with Your requirements. Should You have any queries please contact Us or Your Insurance Broker or Adviser. Your attention is drawn to the Complaints procedure (Complaints and Compensation) on Page 45. The law applicable to this Policy Under the laws of the United Kingdom (England, Scotland Wales and Northern Ireland) both the Insured and the Company may choose the law which applies to this contract to the extent permitted by those laws. Unless the Insured and the Company agree otherwise in writing the Company has agreed with the Insured that the law which applies to this contract is the law which applies to the part of the United Kingdom in which the Insured is based or if the Insured is based in the Channel Islands or the Isle of Man the law of whichever of those two places in which the Insured is based. The Company and the Insured have agreed that any legal proceedings between them in connection with this contract will only take place in the courts of the part of the United Kingdom in which the Insured is based or if the Insured is based in either the Channel Islands or the Isle of Man, the courts of whichever of those two places in which the Insured is based. Fair Processing Notice How we use your Information Please read the following carefully as it contains important information relating to the details that you have given us. You should show this notice to any other party related to this insurance. Who we are This Policy is underwritten by the consortium of Insurers whose identity is stated in the General Endorsement entitled Identity of Insurers and you are giving your information to them. In this information statement, we us and our refers to that consortium. How your information will be used and who we share it with Your information comprises of all the details we hold about you and your transactions and includes information obtained from third parties. If you contact us electronically, we may collect your information identifier, e.g. Internet Protocol (IP) Address or telephone number supplied by your Service Provider. We may use your information to help us: Assess financial and insurance risks; Recover debt; Prevent and detect crime; Develop our services, systems and relationships with you; Understand our customers requirements; Develop and test products and services We do not disclose your information to anyone outside the Company except: Where we have your permission; or Where we are required or permitted to do so by law; or To credit reference and fraud prevention agencies and other companies that Provide a service to us, our partners or you; or Where we may transfer rights and obligations under this agreement. We may transfer your information to other countries on the basis that anyone we pass it to, provides an adequate level of protection. In such cases, we will ensure it is kept securely and used only for the purpose for which you provided it. Details of the companies and countries involved can be provided on request. From time to time we may change the way we use your information. Where we believe you may not reasonably expect such as change we shall write to you. If you do not object, you will consent to that change. We will not keep your information for longer than is necessary. 2
Your Policy Sensitive Information Some of the information we ask you for may be sensitive personal data, as defined by the Data Protection Act 1998 (such as information about health or criminal convictions). We will not use such sensitive personal data about you or others except for the specific purpose for which you provide it and to carry out the services described in your policy documents. Please ensure that you only provide us with sensitive information about other people with their agreement. How to contact us On payment of a small fee, you are entitled to receive a copy of the information we hold about you. If you have any questions, or you would like to find out more about this notice you can write to: Data Protection Liaison Officer, Towergate House, Eclipse Park, Sittingbourne Road, Maidstone, Kent, ME14 3EN Stewart Gardiner Executive Director Underwriting Fusion Insurance Services Limited for and on behalf of Insurers. 3
Policy Definitions Wherever the following words and phrases appear in the Policy they will always have these meanings. Additional definitions appear under other sections of the Policy Company/Our/Us/We The Insurers whose identity is stated in the General Endorsement entitled Identity of Insurers attaching to the Policy Schedule and whose proportionate liability will be detailed upon request Contents Fixtures and fittings (not forming a permanent part of the structure) furniture furnishings utensils and domestic appliances belonging to You or for which you are responsible excluding 1. Trade stock and materials 2. jewellery, watches, furs, precious metals, precious stones, or articles made from them 3. curios, works of art, antiques, sculptures, or rare books, 4. property more specifically insured elsewhere Contents of Common Parts Contents in the communal areas to which all tenants have access of the premises shown in the schedule Contract Works Temporary or permanent works executed or in the course of execution at the Premises by or on behalf of the Insured for the purposes of alterations or improvements to the Premises including unfixed materials on site for use in connection therewith Business The ownership by the Insured of the Property Insured including a) maintenance occupation or use of the Property Insured by the Insured b) the provision and management of canteen sports social or welfare organisations for the benefit of Employees and fire security first aid medical and ambulance services c) private work undertaken with the prior consent of the Insured by Employees for any director or senior official of the Insured Damage Accidental loss or destruction of or damage to the Property Insured in respect of Section A and accidental loss or destruction of or damage to the property used by the Insured at the Premises for the purposes of the Business in respect of Section B Defined Peril Fire lightning explosion aircraft or other aerial devices or articles dropped therefrom riot civil commotion strikers locked-out workers persons taking part in labour disturbances malicious persons theft earthquake storm flood escape of water from any tank apparatus or pipe or impact by any road vehicle or animal Employee a) Any person under a contract of service or apprenticeship with the Insured b) Any person who is hired to or borrowed by the Insured c) Any person engaged in connection with a work experience or training scheme d) Any labour master or person supplied by him e) Any person engaged by labour-only subcontractors f) Any self-employed person working on a labouronly basis under the control or supervision of the Insured g) Any voluntary helper while working for the Insured in connection with the Business Excess The amount which You must pay as the first part of every claim Injury Bodily injury death disease illness or nervous shock Insured/You/Your The Person(s) or company named in the Schedule as the Policyholder Offshore From the time of embarkation onto a conveyance at the point of final departure from land to any offshore rig or any offshore platform and until such time of disembarkation from a conveyance onto land upon return from any offshore rig or any offshore platform Policy The Policy and Schedule and any endorsements attached or issued Premises The premises stated as being insured in the Appendix to Sections A and B. Proposal The signed Proposal or Statement of Fact and declaration and any additional information supplied to the Company by or on behalf of the Insured 4
Policy Definitions Standard Construction Brick stone or concrete built and roofed with slates tiles metal concrete or sheets or slabs composed entirely of incombustible mineral ingredients and plastic roof lights Non-standard Construction Constructed of materials other than those detailed in the definition Standard Construction Territorial Limits a) Great Britain Northern Ireland the Channel Islands or the Isle of Man other than Offshore b) Elsewhere in the world other than Offshore in connection with temporary visits undertaken in the course of the Business by any person normally resident in the territories described in a) above Unoccupied Wholly Unoccupied or any unoccupied portion thereof or not in use for a period in excess of 30 days Money Cash bank and currency notes cheques crossed bankers drafts postal orders luncheon vouchers current postage stamps trading stamps National Insurance stamps Holiday with Pay stamps National Savings stamps National savings certificates Premium Bonds credit sales vouchers or receipts VAT purchase invoices unexpired units in franking machines gift tokens and consumer redemption vouchers belonging to the Insured or for which the Insured are responsible 5
Section A Property Damage The Cover Subject to the terms definitions exclusions and conditions of the Policy the Company will if any of the Property Insured be accidentally lost destroyed or damaged pay to the Insured the value of the property at the time of its loss or destruction or the amount of the damage or at the Company s option reinstate or replace such property or any part of it Property Insured a) The buildings insured shown in the Schedule including i) outbuildings annexes gangways conveniences foundations or footings (unless otherwise excluded) yards forecourts car parks roads pavements landscaping planters ornamental features and statues walls gates fences together with landlords fixtures and fittings therein and thereon tenants improvements interior decorations telecommunication aerials aerial fittings and masts fuel tanks and their ancillary equipment pipework and the like underground pipes drains piping ducting cables wires and associated control gear and accessories on the premises and extending to the public mains but only to the extent of the Insureds responsibility i iv) in respect of blocks of flats and private dwellings only patios terraces hedges paths drives cess pits and septic tanks swimming pools squash and tennis courts gymnasia used by tenants for domestic and leisure purposes communal television and radio receiving aerials satellite dishes and related fittings fitted carpets and other furnishings excluding fitted carpets and other furnishings within properties or portions thereof which are let for domestic purposes fixed glass in windows doors fanlights skylights partitions and fixed sanitaryware v) contents of fuel tanks portable communal property in the open grounds of and used in connection with the buildings Belonging to You or for which You are responsible b) Contents and Contents of Common Parts Contents belonging to You or for which You are responsible of common parts of the buildings including i) money for an amount not exceeding 1,000 in total deeds documents and manuscripts and business books but only for the cost of the materials and clerical labour and computer time expended in reproducing such records for an amount not exceeding 25,000 in total i computer system records but only for the cost of the materials and clerical labour and computer time expended in reproducing such records for an amount not exceeding 25,000 in total subject in respect of all other Contents to the limit shown in the Schedule Excesses This Section does not cover the amounts stated in the following paragraph in respect of each and every loss as ascertained after the application of all other terms and conditions of the Policy including any Condition of Average Cause of Damage Amount 1. Damage by fire lightning explosion Nil aircraft riot civil commotion strikers locked out workers persons taking part in labour disturbances or earthquake 2. Subsidence (where Special Clause 1 is 1000 shown as operative in the Schedule) 3. All other insured Damage 350 Limit of Liability The maximum amount payable during any Period of Insurance under this Section including any payment made under the Extensions is the Sum Insured shown in the Schedule for the Property Damage Section adjusted in accordance with the Inflation Protection Clause if applicable Change in Tenancy The Insured must advise the Company of all changes in tenancy or occupation within the Property Insured in accordance with Condition 1 of this Policy Contractors Interest Where the Insured is required to effect insurance on the Property Insured in the joint names of themselves and the contractor under the terms of a contract condition then the interest of the contractor in the Property Insured as joint insured is noted provided the Insured shall advise the Company of details of any single contract valued at 250,000 or more in advance of the commencement of the work and pay any additional premium the Company may require Day One Average A) Subject to the following Special Conditions the basis upon which the amount payable in respect of the Property Insured under Sums Insured marked Declared Value (DV) in the Schedule is to be calculated shall be the reinstatement of the property lost destroyed or damaged For this purpose reinstatement means a) the rebuilding or replacement of property lost or destroyed which provided the liability of the Company is not increased may be carried out 6
Section A Property Damage i) in any manner suitable to the requirements of the Insured upon another site b) the repair or restoration of property damaged in either case to a condition equivalent to or substantially the same as but not better or more extensive than its condition when new B) The Insured having stated in writing the Declared Value shown in brackets next to the Sum Insured for each of the said items the premium has been calculated accordingly Declared Value means the Insured s assessment of the cost of reinstatement of the Property Insured arrived at in accordance with paragraph A(a) at the level of costs applying at the inception of the Period of Insurance (ignoring inflationary factors which may operate subsequently) together with insofar as the insurance by the item provides due allowance for a) the additional cost of reinstatement to comply with public authority requirements b) professional fees c) debris removal costs d) fitted carpets and other furnishings Special Conditions 1 At the inception of each Period of Insurance the Insured shall notify the Company of the Declared Value of the Property Insured by each of the said item(s) In the absence of such declaration the last amount declared by the Insured shall be taken as the Declared Value for the ensuing Period of Insurance 2 If at the time of Damage the Declared Value of the property covered by such item be less than the cost of reinstatement (as defined in paragraph B above) at the inception of the Period of Insurance then the Company s liability for any Damage shall not exceed that proportion thereof which the Declared Value bears to such cost of reinstatement 3 The liability of the Company for the repair or restoration of property damaged in part only shall not exceed the amount which would have been payable had such property been wholly destroyed 4 No payment beyond the amount which would have been payable in the absence of this clause shall be made a) unless reinstatement commences and proceeds without unreasonable delay b) until the cost of reinstatement shall have been actually incurred c) if the Property Insured at the time of its loss destruction or damage shall be insured by any other insurance effected by or on behalf of the Insured which is not upon the same basis of reinstatement 5 All the terms and conditions of this Policy shall apply in respect of any claim payable under the provisions of this clause except insofar as they are varied hereby 6 Where by reason of a) any of the above Special Conditions no payment is to be made beyond the amount which would have been payable under this Section if this clause had not been incorporated therein or b) the Insured elect not to rebuild the Property Insured in a condition equal to but not better or more extensive than its condition when new then the provisions of this clause are cancelled and the rights and liabilities of the Company and the Insured in respect of the Damage shall be subject to the terms and conditions of the Policy including the following Condition of Average Condition of Average The insurance by each item of this Section is declared to be subject to Average i.e. if the property covered shall at the breaking out of any Damage insured hereby be collectively of greater value than 135% of the Declared Value stated in the Schedule then the Insured shall be considered as being their own insurer for the difference and shall bear a rateable share of the loss accordingly Unoccupied Buildings a) The Company must be notified in writing as soon as reasonably practicable if any Unoccupied building or Unoccupied portion of a building insured hereby becomes occupied or any occupied building or portion of a building becomes Unoccupied and a suitable extra premium be paid if required b) Whenever a building insured by this Section is Unoccupied the Unoccupied Buildings Warranty will apply c) An Excess of 1000 applies to Unoccupied buildings or Unoccupied portions thereof in respect of each and every loss as ascertained after the application of all other terms and conditions of the Policy including any Condition of Average d) When a building or portion of a building is Unoccupied cover in respect of that building or portion thereof shall be restricted to 1. Fire excluding Damage by explosion resulting from fire 2. Explosion excluding Damage caused by bursting of any boiler or other plant which belongs to or is under the control of the Insured and in which internal pressure is due to steam only but this shall not exclude Damage caused by explosion of 7
Section A Property Damage any boiler gas used for domestic purposes only 3 Lightning 4 Aircraft or other aerial devices or articles dropped therefrom Unoccupied Buildings Warranty It is warranted that whenever the Property Insured is Unoccupied a) the Insured shall notify the Company as soon as reasonably practicable when they become aware i) that the building(s) is/are Unoccupied of any loss destruction or damage to the Unoccupied building(s) whether such loss destruction or damage is insured or not with all loss destruction or damage rectified as soon as reasonably practicable b) the buildings are inspected internally at least once during each week by or on behalf of the Insured c) all trade refuse and waste materials are removed from the interior of the premises and no accumulation of refuse and waste is allowed in the adjoining yards or spaces owned by the Insured d) the Insured shall secure the building and put all protective and locking devices and any alarm protection into effective operation with letterboxes sealed to prevent the accumulation of mail e) the gas water and electricity supplies are turned off at the mains (except electricity needed to maintain any fire or intruder alarm system in operation) and any sprinkler system be drained and during the months of October to March (inclusive) the water system is drained f) the Insured shall implement any additional protections the Company may require within the time scale specified by the Company Fire Extinguishing Appliances Where the Company has agreed to allow a discount for the fire extinguishing equipment the Insured warrant that i) the said appliances will be maintained in efficient working order during the currency of this insurance i the routine tests prescribed by the Company are carried out and any defects revealed by such tests are promptly remedied the Company s written consent is obtained to any proposed changes repairs or alterations to any sprinkler or alarm installation Inflation Protection The Company will adjust the Sum Insured in line with suitable indices of costs and the renewal premium for this Section will be based on the adjusted Sum Insured Mortgagees and Other Interests The interest of the Leaseholder(s) Mortgagee(s) and Tenant(s) in the individual portions of the Property Insured to which their interest applies is noted such interest to be advised to the Company in the event of a claim In addition the interest of the Insured or Mortgagee(s) in this insurance shall not be prejudiced by any alteration act or neglect of the occupier(s) or Mortgagor(s) of any building hereby insured whereby the risk of Damage is increased without the authority or knowledge of the Insured or Mortgagee(s) provided that the Insured or Mortgagees shall as soon as reasonably practicable on becoming aware thereof give notice in writing to the Company and on demand pay such reasonable additional premium as the Company may require Payments on Account In the event of Damage the Company will make monthly payments on account to the Insured if required Reinstatement of Sum Insured In the event of loss the Sum Insured by this Section will be automatically reinstated from the date of the loss unless written notice is given to the contrary either by the Company or by the Insured and the Insured undertake to pay such necessary premiums as may be required for such reinstatement from that date Repairs and Alterations Joiners and other tradesmen may be employed to effect repairs or structural alterations in all or any of the buildings insured without prejudice to the insurance hereby Sale of Property Insured If at the time of Damage to any building insured under this Section the Insured shall have contracted to sell the interest of the Insured in such building and the purchase shall not have been but shall be thereafter completed the purchaser on completion of the purchase if and so far as the property is not otherwise insured by or on behalf of the purchaser against such Damage shall be entitled to the benefits of this Section of the Policy so far as it relates to such Damage without prejudice to the rights and liabilities of the Insured or the Company under this Section up to the date of completion Rights of Recovery Waiver In the event of a claim arising under this Section the Company agrees to waive any rights remedies or relief to which they might have become entitled by subrogation against a) any Company standing in relation of Parent to Subsidiary (Subsidiary to Parent) to the Insured as defined in the Companies Act or the Companies (N.I.) Order as appropriate current at the time of Damage 8
Section A Property Damage b) any Company which is a subsidiary of a Parent Company of which the Insured are themselves a Subsidiary in each case within the meaning of the Companies Act or the Companies (N.I.) Order as appropriate current at the time of Damage c) any tenant provided that i) the Damage did not result from a criminal fraudulent or malicious act of the tenant the tenant contributes to the cost of insuring the Property Insured against the event which caused the Damage Seventy Two Hours Clause Damage occurring within 72 consecutive hours of and arising from the Defined Perils of storm or flood is deemed to be one claim The Insured have the right to select the moment from which the 72 hour period shall be deemed to have commenced within the terms of this Section provided that such Damage occurred prior to the expiry of the Period of Insurance Reinstatement to Match Where the Property Insured has suffered Damage You may replace repair or restore the property with equivalent property which employs current technology and replacement repair or restoration with such property for the purposes of this Section shall not be regarded as being better or more extensive than when new. This Section further extends to include the replacement or modification of undamaged property insofar as it is necessary to adapt it to operate in conjunction with that property which has been replaced repaired or restored provided that Our total liability is not increased beyond the amount that would otherwise have been payable for the replacement repair or restoration of the property destroyed or damaged in its original form Extensions The Insurance by this Section extends to include Additional Metered Supply Charges Additional metered water gas electricity or other metered supply charges incurred by the Insured as a result of Damage except those in respect of any loss which has not been discovered and remedial action taken within 30 days of the occurrence of the Damage subject to a limit of 25,000 Additional Sprinkler Costs The costs incurred in upgrading an automatic sprinkler installation to current Loss Prevention Council rules solely as required by the Company as a result of Damage to the Property Insured provided that at the time of the Damage the installation conformed - to the 28th or 29th Edition Rules or - to the LPC Rules current at the time of installation but did not conform to subsequent amendments to those rules Loss of Rent and Alternative Residential Accommodation If as a result of Damage the residential portions of the Property Insured are unfit to live in or access is denied the Company will pay insofar as they are not otherwise insured a) loss of rent and management charges you should have received but have lost b) the costs of reasonable alternative accommodation and temporary storage of residents furniture c) the cost of reasonable accommodation in kennels or catteries for residents dogs and cats Provided the liability of the Company under this Extension shall not exceed 20% of the Sum Insured on the Property Insured which has been damaged Fly Tipping The cost (insofar as it is not otherwise insured) of removing materials deposited at the Property Insured as a result of fly tipping for an amount not exceeding 5,000 any one claim Professional Fees An amount in respect of architects surveyors legal and consulting engineers fees necessarily incurred in the reinstatement or repair of the Property Insured consequent upon its Damage but not for preparing any claim it being understood that the amount payable for such Damage and fees shall not exceed in the aggregate the Sum Insured 9
Section A Property Damage Automatic Cover (Newly Acquired Properties) Automatic cover for premises newly acquired by the Insured in the United Kingdom the Channel Islands or the Isle of Man to the extent that the Insured s interest is not protected by any other more specific insurance provided that a) as soon as reasonably practicable the Insured shall notify the Company in writing of each premises acquired and arrange specific cover with the Company b) this cover shall operate for a maximum period of 30 days from the date the Insured acquired their interest in the Premises c) the Company s maximum liability any one claim for Buildings and Rent shall not exceed 2,000,000 in respect of any Premises d) in respect of any Premises purchased for renovation refurbishment or redevelopment the Day One Average clause shall not apply i) the insurance under this extension shall be subject to all the terms provisions clauses conditions and exclusions of the Policy if cover is provided under this Extension then cover is not provided under the Capital Additions Extension at the same time in respect of the same property Capital Additions Subject to its terms and conditions a) any newly acquired and/or newly erected buildings or buildings in course of erection (excluding any property for which a building contractor is responsible) insofar as the same are not otherwise insured and b) alterations additions and improvements to buildings but not in respect of any appreciation in value anywhere in the United Kingdom Channel Islands or the Isle of Man provided that i) at any one situation this cover shall not exceed i a) 2,000,000 in respect of any newly acquired and/or newly erected buildings or buildings in course of erection b) 500,000 in respect of alterations additions and improvements to buildings the Insured undertake to give particulars of such extension of cover as soon as reasonably practicable and to effect specific insurance thereon retrospective to the date of the commencement of the Company s liability the provisions of this extension shall be fully maintained notwithstanding any specific insurance effected under ( above iv) the insurance under this extension shall be subject to all the terms previsions clauses conditions and exclusions of the policy v) if cover is provided under this Extension then cover is not provided under the Automatic Cover (Newly Acquired Properties) Extension at the same time in respect of the same property Contract Works Contract Works to the extent to which the Insured has contracted to arrange cover subject to a limit of 250,000 any one claim at any Premises This insurance shall only apply in so far as the Contract. Works are not otherwise insured Damage to Landscaped Gardens The cost of restoring any damage to landscaped gardens and grounds including trees as a result of Damage insured by this Section subject to a limit of 50,000 any one claim The Company will not pay costs and expenses arising due to the failure of trees shrubs and plants turf and the like to germinate or become established Inadvertent Failure to Insure Subject to its terms and conditions 1. any newly acquired and/or newly erected buildings or buildings in the course of erection (excluding any property for which a building contractor is responsible) 2. alterations additions and improvements to an insured building but not in respect of any appreciation in value which You have an obligation to insure whether owned or leased by You but which have inadvertently been left uninsured The maximum We will pay in respect of any one situation under this Extension is a) 2,000,000 in respect of any newly acquired and/or newly erected buildings or buildings in the course of erection b) 500,000 in respect of alterations additions and improvements to an insured building situate anywhere in the United Kingdom Channel Islands or the Isle of Man You must advise Us in writing as soon as reasonably practicable You become aware of a building inadvertently left uninsured and pay the appropriate premium due from the date Our liability commenced You must carry out at not less than twelve month intervals a check of all properties owned or leased by You and for which You are responsible to ensure that effective insurance is in force for each of them 10
Section A Property Damage Damage to Cables and Underground Pipes The cost of repairing accidental damage for which the Insured is responsible to cables and underground pipes and drains (and their inspection covers) on the Property Insured or connecting them to the public mains subject to the terms and conditions of the Policy European Community and Public Authorities Such additional cost of reinstatement as may be incurred solely by reason of the necessity to comply with the Stipulations of a) European Community Legislation or b) Building or other Regulations under or framed in pursuance of any Act of Parliament or Bye-Laws of any Public Authority (hereafter referred to as the Stipulations ) in respect of the lost destroyed or damaged property thereby insured undamaged portions thereof Excluding a) the cost incurred in complying with the Stipulations i) in respect of Damage occurring prior to the granting of this Extension i iv) in respect of Damage not insured by this Section under which notice has been served upon the Insured prior to the happening of the Damage for which there is an existing requirement which has to be implemented within a given period v) in respect of property entirely undamaged by any peril hereby insured against b) the additional cost that would have been required to make good the property lost destroyed or damaged to acondition equal to its condition when new had the necessity to comply with the stipulations not arisen c) the amount of any charge or assessment arising out of capital appreciation which may be payable in respect of the property or by the owner thereof by reason of compliance with the stipulations Special Conditions 1. The work of reinstatement must be commenced and carried out without unreasonable delay and in any case must be completed within twelve months after the Damage or within such further time as the Company may allow (during the said twelve months) and may be carried out upon another site (if the stipulations so necessitate) subject to the liability of the Company under this extension not being thereby increased 2. If the liability of the Company under (any item of) this Section apart from this extension shall be reduced by the application of any of the terms and conditions of the Policy then the liability of the Company under this extension (in respect of any such item) shall be reduced in like proportion 3. The total amount recoverable under any item of this Section shall not exceed its Sum Insured 4 All the terms and conditions of the policy except insofar as they are varied hereby shall apply as if they had been incorporated herein Extinguishment and Alarm Resetting Expenses The reasonable costs incurred by the Insured in refilling fire extinguishing appliances replacing used sprinkler heads and resetting fire or intruder alarms as a result of Damage to the Property Insured Further Investigation Expenses Where a Building has suffered Damage and in the opinion of a competent construction professional there is a reasonable possibility of other Damage to portions of the same Building which is not immediately apparent the Company will pay the reasonable costs incurred by the Insured with the Company s prior consent in establishing whether or not such Damage has occurred The Company will also pay the reasonable costs incurred by the Insured in establishing whether or not other Buildings in the vicinity have suffered Damage in the same incident but only if such Buildings are subsequently found to have suffered such Damage for which the Company is liable Glass Breakage a) temporary boarding up following breakage b) the cost of removal or replacement of fixtures and fittings in course of the replacement of the glass c) lettering or other ornamental work and alarm foil on glass Personal Possessions Directors partners customers visitors and Employees personal effects of every description (other than motor vehicles) insofar as they are not otherwise insured for an amount not exceeding 500 in respect of any one person Removal of Debris Costs and expenses necessarily incurred by the Insured with the consent of the Company in a) removing debris b) dismantling and/or demolishing c) shoring up or propping of the portions of the Property Insured d) clearing drains sewers and gutters at the Property Insured as a result of Damage hereby insured against 11
Section A Property Damage The Company will not pay for any costs or expenses 1. incurred in removing debris except from the site of such property destroyed or damaged and the area immediately adjacent to such site 2. arising from pollution or contamination of property not insured by this Section The liability of the Company under this Extension and this Section in respect of any item shall in no case exceed the Sum Insured thereby Removal of Debris Tenants Contents The irrecoverable costs and expenses (insofar as they are not otherwise insured) necessarily incurred by the Insured with the consent of the Company in removing from the Property Insured the debris of contents (not being the property of the Insured) as a result of Damage hereby insured against The Company will not pay for any costs or expenses 1. incurred in removing debris except from the site of such property destroyed or damaged and the area immediately adjacent to such site 2. arising from pollution or contamination of property not insured by this Section The liability of the Company under this Extension and this Section in respect of any item shall in no case exceed the Sum Insured thereby Temporary Removal Temporary removal of a) property insured by this Section for cleaning renovation or repair b) deeds documents and plans to any building within the United Kingdom Channel Islands or the Isle of Man Provided the liability of the Company under each of (a) and (b) shall not exceed 25,000 Theft of Keys The reasonable costs necessarily incurred in replacing external door locks at the Property Insured following the loss of keys by a) theft from the Property Insured or Registered Office or from the home of b) theft following hold-up whilst such keys are in the personal custody of the Insured or any principal director partner or Employee authorised to hold such keys or reasonable evidence that the keys have been duplicated by an unauthorised person Subject to a limit of 7,500 any one claim Trace and Access The reasonable costs necessarily incurred by the Insured in locating the source and subsequent making good of Damage resulting from i) the escape of water from any tank apparatus or pipe accidental damage to cables underground pipes and drains serving the Property Insured Unauthorised Use of Utilities The cost of metered electricity gas or water for which the Insured are legally responsible arising from its unauthorised use by persons taking possession keeping possession or occupying the Property Insured without the Insured s authority Provided that the Insured shall take all practical steps to terminate such unauthorised use as soon as reasonably practicable after it is discovered Value Added Tax Value Added Tax (VAT) paid by the Insured which is not subsequently recoverable Provided that 1. a) the Insured s liability for such tax arises solely as a result of the reinstatement or repair of the building following Damage b) the Company have paid or have agreed to pay for such Damage c) if any payment made by the Company in respect of the reinstatement or repair of such Damage shall be less than the actual cost of the reinstatement or repair of the Damage any payment under this Extension resulting from that Damage shall be reduced in like proportion 2. the Insured s liability for such tax does not arise from the replacement building having a greater floor area than or being better or more extensive than the destroyed or damaged building 3. where an option to reinstate on another site is exercised the Company s liability under this Extension shall not exceed the amount of tax that would have been payable had the building been rebuilt on its original site 4. the Company s liability under this Extension shall not include amounts payable by the Insured as penalties or interest for non payment or late payment of tax 5. the Insured has taken all reasonable precautions to insure adequately for VAT liability at inception of the Policy and at each subsequent renewal date. NB Provisions to the contrary elsewhere in this Policy are overridden as follows in respect of those items to which this Extension applies 12
Section A Property Damage i) for the purpose of any condition of Average reinstatement costs will be exclusive of VAT the liability of the Company may exceed the Sum Insured by an item or in the whole the total Sum Insured where such excess is solely in respect of VAT Ground Rent Up to 2 years ground rent if the Premises are rendered temporarily uninhabitable but only during the period necessary for reinstatement and up to a maximum of 10% of the Buildings Sum Insured Clearing of Drains Expenses necessarily and reasonably incurred in cleaning clearing and/or replacing drains gutters sewers and the like at the Premises for which You are responsible in consequence of Damage Your property and where the current owner has failed to maintain adequate insurance cover provided that a) You take all reasonable and appropriate steps to obtain release from Your liabilities under covenants to insure such property on its disposal b) the maximum We will pay under this Extension is 2,000,000 in any one Period of Insurance c) the Company s liability under this Extension shall not include contribution in respect of any more particular insurance effected by any succeeding owner or tenant or sub-tenant d) the Company s liability under this Extension shall not include any occurrence happening seven years before the start date of the current Period of Insurance Landlords Gardening Equipment Damage to Landlords gardening equipment whilst in any locked outbuilding but not any amount in excess of 10,000 Unauthorised Occupation If during the period of insurance unauthorised persons take possession keep possession or occupy the Property Insured We will pay the costs You incur in terminating such unauthorised use but not any amount in excess of 5,000 in respect of any one Property in excess of 25,000 in the aggregate in any one Period of Insurance Removal of Wasp and Bee Nests The costs incurred by the Insured up to an amount of 500 any one claim in removing wasp or bee nests from buildings at the premises Tree Felling or Lopping The cost of felling or lopping trees at the Property Insured which are an immediate threat to the safety of life or of Damage to the Property Insured but not any amount in excess of 5,000 any one claim This insurance shall not apply to a) Legal or Local Authority costs involved in removing trees b) costs incurred solely to comply with a Preservation Order Privity of Contract Subject to its terms and conditions an amount You become legally liable to pay following Damage and pay as indemnity to tenants in respect of repair or reinstatement of premises previously owned but which are no longer 13
Section B Loss of Rent The Cover In the event of Damage to the Property Insured under Section A (hereinafter called the Premises) and the Business carried on by the Insured at the Premises stated in the Schedule being in consequence thereof interrupted or interfered with the Company will (subject to the terms definitions exclusions and conditions of the Policy) pay the Insured the amount of loss arising as a result in accordance with the following provisions Indemnity The insurance is limited to loss due to (a) loss of Rent Receivable and (b) increase in cost of working and the amount payable as indemnity thereunder shall be a) the amount by which the Rent Receivable during the Indemnity Period shall in consequence of the Damage fall short of the Standard Rent Receivable b) the additional expenditure necessarily and reasonably incurred including the cost of re-letting the Premises (including legal fees) for the sole purpose of avoiding or diminishing the loss of Rent Receivable which but for that expenditure would have taken place during the Indemnity Period in consequence of the Damage but not exceeding the amount of the reduction in Rent Receivable thereby avoided plus 5% of the Sum Insured on Rent Receivable for the Premises (but not more than 25,000) less any sum saved during the Indemnity Period in respect of such charges or expenses of the Business as may cease or be reduced in the consequence of the Damage provided that i) payment shall have been made or liability admitted under Section A of this Policy Definitions if the Sum Insured by this Section be less than 300% of the Annual Rent Receivable the amount payable shall be proportionately reduced Indemnity Period The period beginning with the occurrence of the Damage and ending not later than the number of months thereafter stated in the Schedule during which the results of the Business shall be affected in consequence of the Damage Rent Receivable The money paid or payable to the Insured for tenancies and other charges and for services rendered in the course of the Business at the Premises Annual Rent Receivable The Rent Receivable during the twelve months immediately before the date of the Damage Standard Rent Receivable The Rent Receivable during the period in the twelve months immediately before the date of the Damage which corresponds with the Indemnity Period Under the Definitions Annual Rent Receivable and Standard Rent Receivable adjustments shall be made as may be necessary to provide for the trend of the Business and for variations in or special circumstances affecting the Business either before or after the Damage or which would have affected the Business had the Damage not occurred so that the figures thus adjusted shall represent as nearly as may be reasonably practicable the results which but for the Damage would have been obtained during the relative period after the Damage Limit of Liability The maximum payable during any Period of Insurance under this Section is the Sum Insured shown in the Schedule plus any payment made under the Rent Review Extension Clauses Advance Rent Receivable Where Rent Receivable is insured in respect of new property developments the Insured must show that but for the Damage Rent Receivable would have been earned and will be required to support a claim for Loss of Rent Receivable by submitting reasonable evidence of the amount of such Rent Receivable and the date from which they would have been earned The Company will have regard to a) actual negotiations with prospective tenants both before and after the Damage b) demand for similar accommodation in the locality c) the general level of rents applying If required the advice of a professional valuer acceptable to both the Insured and the Company will be sought and such fees will be included in the indemnity under this Clause Alternative Trading If during the Indemnity Period accommodation shall be provided or services rendered elsewhere than at the Premises for the benefit of the Business either by the Insured or others on their behalf the money paid or payable in respect of such accommodation and services shall be brought into account in arriving at the Rent Receivable during the Indemnity Period Bombscare or Unlawful Occupation This Section extends to include interruption of or interference with the Business due to a) the suspected or actual presence of an incendiary or explosive device on or in the vicinity of the Premises 14
Section B Loss of Rent b) occupation of the Premises or other property in the vicinity by members of a terrorist or criminal organisation or other unlawful occupants Provided the Company will not be liable for i) any incident involving an interruption of less than 48 hours duration i any period other than the actual period of prevention or hindrance of access to the Premises eviction costs The insurance by this Clause shall only apply for the period beginning with the loss and ending not later than three months thereafter during which the results of the Business shall be affected in consequence of the Damage Buildings Awaiting Sale If at the time of the Damage the Insured shall have contracted to sell their interest in the Premises or shall have accepted an offer in writing to purchase their interest in the Premises subject to contract and the sale is cancelled or delayed solely in consequence of the Damage Provided that the Insured shall make all reasonable efforts to complete the sale of the Premises as soon as reasonably practicable after the Damage the Insured may opt for the amount payable by the Company to be as follows i) during the period prior to the date upon which but for the Damage the Premises would have been sold the loss of Rent Receivable being the actual amount of the reduction in Rent Receivable solely in consequence of the Damage during the period commencing with the date upon which but for the Damage the Premises would have been sold and ending with the actual date of sale or with the expiry of the Indemnity Period if earlier the loss in respect of interest being a) the actual interest incurred on capital borrowed (solely to offset in whole or part the loss of use of the sale proceeds) for the purpose of financing the Business b) the investment interest lost to the Insured on any balance of the sale proceeds (after deduction of any capital borrowed as provided under a) less any amount receivable in respect of Rent Receivable b) the additional legal fees and other expenditure incurred solely as a result of the cancellation or delay in consequence of the Damage but not exceeding either an amount equivalent to the expenditure incurred immediately prior to the Damage or 50,000 whichever is the less Capital Additions This Section extends to include Rent Receivable in respect of a) alterations additions extensions and improvements to the Premises insured b) newly acquired and or newly erected buildings anywhere in the United Kingdom Channel Islands or the Isle of Man provided they are not otherwise insured Provided that i) at any one Premises the cover shall not exceed 500,000 i the Insured undertake to give particulars of such extension of cover as soon as practicable but at least every six months and to effect specific insurance thereon retrospective to the date of the commencement of the Company s liability the provisions of this Clause shall be fully maintained notwithstanding any specific insurance effected under ( above Denial of Access and Loss or Damage at Managing Agents Premises Subject to the conditions of the Policy loss resulting from interruption of or interference with the Business in consequence of Damage a) to property in the vicinity of the Premises destruction of or damage to which shall prevent or hinder the use of the Premises or access thereto whether the Premises or property of the Insured therein shall be damaged or not (but excluding loss destruction of or damage to property of any supply undertaking from which the Insured obtain electricity gas or water or telecommunications services which prevent or hinder the supply of such services) b) to property at the premises of the Insured s Managing Agents shall be deemed to be loss resulting from damage to property used by the Insured at the Premises i the additional expenditure being a) the expenditure necessarily and reasonably incurred in consequence of the Damage solely to avoid or minimise the loss payable under (i) and ( immediately above but not exceeding the amount of loss avoided by such expenditure 15